Self-Regulatory Organizations; National Securities Clearing Corporation; Notice of Filing of Proposed Rule Change Relating to the Decommissioning of NSCC's Over-the-Counter (OTC) Equity Comparison Service, 42989-42991 [2013-17178]
Download as PDF
<![CDATA[
Federal Register / Vol. 78, No. 138 / Thursday, July 18, 2013 / Notices
markets faster than a Floor broker could
while located on the Floor.20
Accordingly, even if there continues to
be a time and place advantage for Floor
brokers by virtue of their presence on
the Floor, the type of information
available to Floor brokers is no longer
the type of information that would
provide Floor brokers with an advantage
in connection with intra-day trading.21
As a result of these changes to its
market and to overall market structure,
NYSE contended that Rules 95(c) and
(d) are no longer operating to place
Floor brokers on equal footing with
other market participants, but instead
are placing them at a disadvantage in
the largely automatic market that has
developed in the almost twenty years
since the restrictions were put in
place.22 According to NYSE, deleting
Rules 95(c) and (d) and the related
Supplementary Materials would place
Floor brokers on a more equal footing
with other market participants utilizing
automatic executions.
TKELLEY on DSK3SPTVN1PROD with NOTICES
III. Discussion and Commission
Findings
After careful review, the Commission
finds that the proposed rule changes are
consistent with the requirements of the
Act and the rules and regulations
thereunder applicable to a national
securities exchange.23 Specifically, the
Commission finds that the Proposals are
consistent with Section 6(b)(5) of the
Act,24 in that they are designed to
remove impediments to and perfect the
mechanism for a free and open market
and a national market system and, in
general, to protect investors and the
public interest, and Section 6(b)(8) of
the Act,25 in that they do not impose
any burden on competition not
necessary or appropriate in furtherance
of the Act. In particular, the
Commission believes that the Proposals
are consistent with these provisions
because they are designed to place Floor
brokers on more equal footing with
other market participants that enter
interest electronically.
The Commission notes that the
Exchanges have undergone fundamental
changes since the adoption of Rules
95(c) and (d), and that these changes
have largely allayed the specific
concerns that these rules were designed
to address. For example, given the
20 See
NYSE Notice, 77 FR at 68189.
id. at 68189–68190.
22 See id., 77 FR at 68190.
23 In approving this proposed rule change, the
Commission has considered the proposed rule’s
impact on efficiency, competition and capital
formation. 15 U.S.C. 78c(f).
24 15 U.S.C. 78f(b)(5).
25 15 U.S.C. 78f(b)(8).
21 See
VerDate Mar<15>2010
17:20 Jul 17, 2013
Jkt 229001
increasing automation of the Exchanges,
the Commission believes that there is a
diminished concern that Floor brokers
engaging in intra-day trading could
‘‘crowd out’’ public customer orders by
virtue of their location on the trading
Floor in relation to Designated Market
Makers (formerly specialists). The
Commission also notes that these rules
only apply to instances where a Floor
broker is representing both sides of an
order at the minimum variation; to the
extent that securities trading at the
minimum variation are typically more
liquid and have a higher trading
volume, this further reduces the concern
that Floor brokers could crowd out other
market participants through intra-day
trading.
In the Order Instituting Proceedings,
the Commission expressed concern that
the elimination of Rules 95(c) and (d)
may not be consistent with the
requirements of the Act. Specifically,
given benefits conferred by the
Exchanges upon Floor brokers, such as
preferential parity allocation of
executed shares, the Commission noted
that removing the restrictions imposed
by Rule 95(c) and (d) could produce
unfair advantages for Floor brokers.
While the Commission recognizes that
the deletion of Rules 95(c) and (d) may
competitively benefit Floor brokers, the
Commission believes that, on balance,
the Proposals are consistent with the
Act because the specific concerns that
these rules were originally designed to
address have been largely allayed.
For the reasons stated above, the
Commission finds that the Proposals are
consistent with the requirements of the
Act.
IV. Conclusion
It is therefore ordered, pursuant to
Section 19(b)(2) of the Act,26 that the
proposed rule changes (SR–NYSE–
2012–57 and SR–NYSEMKT–2012–58)
be, and hereby are, approved.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.27
Elizabeth M. Murphy,
Secretary.
[FR Doc. 2013–17196 Filed 7–17–13; 8:45 am]
BILLING CODE 8011–01–P
PO 00000
26 15
27 17
U.S.C. 78s(b)(2).
CFR 200.30–3(a)(12).
Frm 00062
Fmt 4703
Sfmt 4703
42989
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–69980; File No. SR–NSCC–
2013–09]
Self-Regulatory Organizations;
National Securities Clearing
Corporation; Notice of Filing of
Proposed Rule Change Relating to the
Decommissioning of NSCC’s Over-theCounter (OTC) Equity Comparison
Service
July 12, 2013.
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934
(‘‘Act’’) 1 and Rule 19b–4 thereunder,2
notice is hereby given that on July 2,
2013, the National Securities Clearing
Corporation (‘‘NSCC’’) filed with the
Securities and Exchange Commission
(‘‘Commission’’) the proposed rule
change as described in Items I, II and III
below, which Items have been prepared
by the clearing agency. The Commission
is publishing this notice to solicit
comments on the proposed rule change
from interested persons.
I. Clearing Agency’s Statement of the
Terms of Substance of the Proposed
Rule Change
The proposed rule change consists of
amendments to the Rules & Procedures
(‘‘Rules’’) of NSCC with respect to the
decommissioning of the OTC Equity
Comparison Service, as well as
technical changes, as more fully
described below.
II. Clearing Agency’s Statement of the
Purpose of, and Statutory Basis for, the
Proposed Rule Change
In its filing with the Commission,
NSCC included statements concerning
the purpose of and basis for the
proposed rule change and discussed any
comments it received on the proposed
rule change. The text of these statements
may be examined at the places specified
in Item IV below. NSCC has prepared
summaries, set forth in sections A, B,
and C below, of the most significant
aspects of such statements.
(A) Clearing Agency’s Statement of the
Purpose of, and Statutory Basis for, the
Proposed Rule Change
(i) NSCC provides a framework for the
comparison and recording of
transactions in eligible equity and debt
securities executed on national stock
exchanges and in the over-the-counter
(‘‘OTC’’) market, through its
Comparison and Trade Recording
Operation, provided pursuant to Rule 7
1 15
2 17
E:\FR\FM\18JYN1.SGM
U.S.C. 78s(b)(1).
CFR 240.19b–4.
18JYN1
TKELLEY on DSK3SPTVN1PROD with NOTICES
42990
Federal Register / Vol. 78, No. 138 / Thursday, July 18, 2013 / Notices
and Procedure II of the Rules. NSCC
also provides an Obligation Warehouse
service pursuant to Rule 51 and
Procedure IIA, under which certain
transactions may be submitted for
comparison that are not otherwise
submitted for processing to NSCC
through its other services. Over time, in
efforts to promote straight-through
processing, markets have assumed
increasing responsibility for trade
comparison (i.e., matching the buy and
sell side of a securities transaction) at
the point of trade, and submitting the
transaction to NSCC on a ‘‘locked-in’’
basis for trade recording purposes (i.e.,
with the transaction details having been
already compared). Today, all
marketplaces interfacing with NSCC
have assumed responsibility for equity
comparison on their respective venues;
as a result the level of over-the-counter
bilateral submissions of equity
transactions to the equity comparison
operation has become nominal.3 In
addition, NSCC’s OTC Equity
Comparison service operates through
legacy batch processing at the end of the
day. Trade capture processes now
mostly run in a real-time environment.
Rule 7 and Procedure II each contain
notes stating that the comparison
function offered thereunder will
discontinue once each exchange and/or
marketplace assumes responsibility for
trade comparison.4 Therefore, in light of
the assumption of the comparison
function by each marketplace and
minimal volume to equity trades
submissions to the OTC Equity
Comparison service, NSCC proposes to
decommission its OTC Equity
Comparison service offering. The
proposed change will not, however,
impact comparison services with
respect to debt transactions (which are
compared through the Real Time Trade
Matching (or ‘‘RTTM’’) system) or
transactions submitted to the Obligation
Warehouse, both of which will continue
to be processed in the ordinary course.
Once the OTC Equity Comparison
service is decommissioned, comparison
submissions for equity transactions
other than those submitted to the
Obligation Warehouse in accordance
with Rule 51 and Procedure IIA will not
be accepted by NSCC and related output
will not be produced. As a result, upon
the effective date of this proposal, all
equity transactions submitted for
processing to NSCC, other than those
3 During May 2013, NSCC compared an average
of approximately 90 sides (an approximate average
of 45 trades) for equity transactions through its OTC
Comparison service. As of June 24, 2013, NSCC
compared a total of 74 sides (37 trades) for the
entire month of June 2013 to date.
4 See footnotes to Rule 7 and Procedure II.
VerDate Mar<15>2010
17:20 Jul 17, 2013
Jkt 229001
submitted through the Obligation
Warehouse, must be compared prior to
submission (i.e., at the marketplace of
execution or through FINRA/NASDAQ’s
Automated Comparison Transaction
facility (‘‘ACT’’) and submitted to NSCC
on a locked-in basis for trade recording).
To facilitate this proposal, NSCC will
mend Rule 7 (Comparison and Trade
Recording Operation) and Procedure II
(Trade Comparison and Recording
Service) to reflect rules text changes
consistent with the above. NSCC also
proposes to make technical changes to
Procedure II to: (i) delete a provision
relating to the submission of municipal
securities transactions by Members on
behalf of non-members, and (ii) delete a
provision relating to potential
announcement via Important Notice of
the availability of the comparison
service for when-issued corporate
securities.5
In addition Rule 5 (General
Provisions) will be revised to clarify that
output issued by NSCC with respect to
transactions either compared by it, or
recorded locked-in transactions (defined
as ‘‘Compared Contracts’’), evidence
valid, binding and enforceable
compared transactions for purposes of
the Rules. In this regard, Rule 1
(Definitions) will be revised to reflect
the definition of ‘‘Compared Contracts’’.
NSCC will also: (i) Amend its fee
schedule in Addendum A to the Rules
to delete references to charges
associated with OTC equity comparison,
and (ii) make technical changes to the
numbering of footnotes and certain
cross-references in the Rules to reflect
the changes noted above.
The effective date of the proposed
rule change will be announced via an
NSCC Important Notice at least 30 days
in advance of its implementation.
(ii) Statutory Basis. The proposed rule
change is consistent with the
requirements of Section 17A(b)(3)(F) 6 of
the Securities Exchange Act of 1934, as
amended (the ‘‘Act’’), and the rules and
regulations thereunder, because it
provides for operational efficiencies by
promoting the comparison of
transactions at the point of trade, and
therefore are designed to promote the
prompt and accurate clearance and
settlement of securities transactions.
5 With respect to the former provision, the
function described is no longer in use and the
provision has become obsolete, and with respect to
the latter provision, a comparison service is not
currently scheduled to be implemented for
corporate when-issued securities and NSCC would
submit a rule filing to the Commission in the event
such an implementation is proposed.
6 15 U.S.C. 78q–1(b)(3)(F).
PO 00000
Frm 00063
Fmt 4703
Sfmt 4703
(B) Clearing Agency’s Statement on
Burden on Competition
NSCC does not believe that the
proposed rule change will have any
impact, or impose any burden, on
competition, as usage of the OTC Equity
Comparison service has declined
significantly and other alternatives
(including NSCC’s Obligation
Warehouse and the ACT facility) are
available.
(C) Clearing Agency’s Statement on
Comments on the Proposed Rule
Change Received From Members,
Participants, or Others
Written comments relating to the
proposed rule change have not yet been
solicited or received with respect to this
filing.
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
Within 45 days of the date of
publication of this notice in the Federal
Register or within such longer period
up to 90 days (i) as the Commission may
designate if it finds such longer period
to be appropriate and publishes its
reasons for so finding or (ii) as to which
the self-regulatory organization
consents, the Commission will:
(A) By order approve or disapprove
such proposed rule change, or
(B) institute proceedings to determine
whether the proposed rule change
should be disapproved.
IV. Solicitation of Comments
Interested persons are invited to
submit written data, views and
arguments concerning the foregoing,
including whether the proposed rule
change is consistent with the Act.
Comments may be submitted by any of
the following methods:
Electronic Comments
• Use the Commission’s Internet
comment form (https://www.sec.gov/
rules/sro.shtml); or
• Send an email to rulecomments@sec.gov. Please include File
Number SR–NSCC–2013–09 on the
subject line.
Paper Comments
• Send paper comments in triplicate
to Elizabeth M. Murphy, Secretary,
Securities and Exchange Commission,
100 F Street NE., Washington, DC
20549–1090.
All submissions should refer to File
Number SR–NSCC–2013–09. This file
number should be included on the
subject line if email is used. To help the
Commission process and review your
comments more efficiently, please use
E:\FR\FM\18JYN1.SGM
18JYN1
Federal Register / Vol. 78, No. 138 / Thursday, July 18, 2013 / Notices
only one method. The Commission will
post all comments on the Commission’s
Internet Web site (https://www.sec.gov/
rules/sro.shtml). Copies of the
submission, all subsequent
amendments, all written statements
with respect to the proposed rule
change that are filed with the
Commission, and all written
communications relating to the
proposed rule change between the
Commission and any person, other than
those that may be withheld from the
public in accordance with the
provisions of 5 U.S.C. 552, will be
available for Web site viewing and
printing in the Commission’s Public
Reference Room, 100 F Street NE.,
Washington, DC 20549 on official
business days between the hours of
10:00 a.m. and 3:00 p.m. Copies of the
filing also will be available for
inspection and copying at the principal
office of NSCC and on NSCC’s Web site
(https://www.dtcc.com/legal/rule_filings/
nscc/2013.php). All comments received
will be posted without change; the
Commission does not edit personal
identifying information from
submissions. You should submit only
information that you wish to make
available publicly. All submissions
should refer to File Number SR–NSCC–
2013–09 and should be submitted on or
before August 8, 2013.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.7
Elizabeth M. Murphy,
Secretary.
[FR Doc. 2013–17178 Filed 7–17–13; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–69985; File No. SR–DTC–
2013–04]
Self-Regulatory Organizations; the
Depository Trust Company; Order
Approving Proposed Rule Change in
Connection With the Modifications to
Receiver Authorized Delivery and
Reclaim Processing Value Limits by
Transaction
July 12, 2013.
TKELLEY on DSK3SPTVN1PROD with NOTICES
I. Introduction
On May 17, 2013, The Depository
Trust Company (‘‘DTC’’) filed with the
Securities and Exchange Commission
(‘‘Commission’’) the proposed rule
change SR–DTC–2013–04 pursuant to
Section 19(b)(1) of the Securities
7 17
CFR 200.30–3(a)(12).
VerDate Mar<15>2010
17:20 Jul 17, 2013
Jkt 229001
Exchange Act of 1934 (‘‘Act’’) 1 and Rule
19b–4 thereunder.2 The proposed rule
change was published for comment in
the Federal Register on June 5, 2013.3
The Commission did not receive any
comments on the proposed rule change.
This order approves the proposed rule
change.
II. Description
DTC filed the proposed rule change to
modify its Rules & Procedures
(‘‘Rules’’), with respect to Receiver
Authorized Delivery (‘‘RAD’’) and
reclaim transactions, to: (i) Lower limits
against which valued Deliver Orders
(‘‘DO’’) and Payment Orders (‘‘PO’’) 4
will be required to be accepted for
receipt (i.e., ‘‘matched’’ for settlement);
(ii) lower limits for same day reclaim
transactions; and (iii) revise the process
for RAD matching of stock loans and
returns.
Currently DOs and POs valued in
amounts above $15 million and $1
million, respectively, are subject to the
RAD process, which allows receivers to
review and reject transactions that they
do not recognize prior to processing for
delivery. In contrast, lower value DOs
and POs do not require the receiver’s
acceptance prior to processing in
accordance with DTC’s Rules; instead,
such transactions may be returned by
the receiver in a reclaim transaction, if
the receiver does not recognize the DO
or PO. While both the reclaim and RAD
functionalities allow receiving DTC
participants (‘‘Participants’’) to exercise
control over which transactions to
accept, reclaims tend to create
uncertainty because transactions can be
returned late in the day, when the
original deliverer may have limited
options to respond. Because such
reclaims are permitted without regard to
risk management controls, the
Participant that initiated the original
delivery versus payment may then incur
a greater settlement obligation,
increasing credit and liquidity risk to
that Participant and to DTC.5
U.S.C. 78s(b)(1).
CFR 240.19b–4.
3 Release No. 34–69666 (May 30, 2013), 78 FR
33876 (June 5, 2013).
4 A Deliver Order is a book-entry movement of a
particular security between two DTC participants.
A Payment Order is a method for settling funds
amounts related to transactions and payments not
associated with a Deliver Order. The defined term
‘‘DO’’ as used in this proposed rule change filing
includes all valued Deliver Orders except for
Deliver Orders of: (i) Money market instruments
and (ii) institutional deliveries affirmed through
Omgeo, both of which are not impacted by the
proposed rule change.
5 DTC’s risk management controls, including
Collateral Monitor and Net Debit Cap (as defined in
DTC Rule 1), are designed so that DTC can effect
system-wide settlement notwithstanding the failure
PO 00000
1 15
2 17
Frm 00064
Fmt 4703
Sfmt 4703
42991
Under the proposal, DTC is changing
RAD to require Participants to match all
settlement-related transactions valued
greater than $7.5 million for valued DOs
and $500,000 for POs, prior to
processing. Matched transactions will
be processed through DTC subject to
risk management controls.6 According
to DTC the rule change will reduce the
intraday uncertainty that may arise from
reclaim transactions and any potential
credit and liquidity risk from such
reclaims.
DTC also proposed a further revision
to RAD for stock loan and stock loan
return transactions. Currently,
Participants may set bilateral and global
limits for transactions subject to RAD
which allow transactions with
settlement values that are greater than
DTC’s default limits, but less than the
Participant’s defined bilateral and/or
global limits, to be passively approved.7
Any established limits apply to all
transactions with the applicable
counterparties (on either a bilateral or
global basis) for all transaction types
subject to RAD. However, stock loan
transactions (and stock loan returns) are
often different from ordinary buys and
sells, because stock loans are often
agreed upon on a same-day basis (as
opposed to T+3 settlement of purchases
and sales). Taking this difference into
account, in addition to the revisions
described above, the rule changes will
allow receiving Participants to establish
bilateral and global RAD limits for stock
loans and stock loan returns that are
different from other transaction types.8
The DTC Settlement Services Guide
will be revised to reflect the changes
discussed above, and the effective date
of the rule change will be announced
to settle of its largest Participant or affiliated family
of Participants. Net Debit Cap limits the net debit
balance a Participant can incur so that the unpaid
settlement obligation of the Participant, if any,
cannot exceed DTC liquidity resources. The
Collateral Monitor tests that a receiver has adequate
collateral to secure the amount of its net debit
balance so that DTC may borrow funds to cover that
amount for system-wide settlement if the
Participant defaults.
6 Each reclaim of a matched transaction that is
attempted will be processed as an original
instruction and be subject to risk management
controls and receiver approval (the original
deliverer) via RAD.
7 A bilateral limit established by a Participant
applies to transactions from a specified deliverer. A
global limit established by a Participant is applied
to all valued DOs and POs to the Participant not
otherwise subject to a bilateral limit. Transactions
passively approved under such limits may not be
reclaimed.
8 The use of a stock lending and return profile
will be voluntary and, absent a profile, the
Participant’s transactions will be subject to RAD as
applicable to ordinary DOs, including the
established DTC limits as well as Participant
established bilateral and global limits as described
above.
E:\FR\FM\18JYN1.SGM
18JYN1
]]>Agencies
[Federal Register Volume 78, Number 138 (Thursday, July 18, 2013)]
[Notices]
[Pages 42989-42991]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2013-17178]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-69980; File No. SR-NSCC-2013-09]
Self-Regulatory Organizations; National Securities Clearing
Corporation; Notice of Filing of Proposed Rule Change Relating to the
Decommissioning of NSCC's Over-the-Counter (OTC) Equity Comparison
Service
July 12, 2013.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act'') \1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that
on July 2, 2013, the National Securities Clearing Corporation
(``NSCC'') filed with the Securities and Exchange Commission
(``Commission'') the proposed rule change as described in Items I, II
and III below, which Items have been prepared by the clearing agency.
The Commission is publishing this notice to solicit comments on the
proposed rule change from interested persons.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------
I. Clearing Agency's Statement of the Terms of Substance of the
Proposed Rule Change
The proposed rule change consists of amendments to the Rules &
Procedures (``Rules'') of NSCC with respect to the decommissioning of
the OTC Equity Comparison Service, as well as technical changes, as
more fully described below.
II. Clearing Agency's Statement of the Purpose of, and Statutory Basis
for, the Proposed Rule Change
In its filing with the Commission, NSCC included statements
concerning the purpose of and basis for the proposed rule change and
discussed any comments it received on the proposed rule change. The
text of these statements may be examined at the places specified in
Item IV below. NSCC has prepared summaries, set forth in sections A, B,
and C below, of the most significant aspects of such statements.
(A) Clearing Agency's Statement of the Purpose of, and Statutory Basis
for, the Proposed Rule Change
(i) NSCC provides a framework for the comparison and recording of
transactions in eligible equity and debt securities executed on
national stock exchanges and in the over-the-counter (``OTC'') market,
through its Comparison and Trade Recording Operation, provided pursuant
to Rule 7
[[Page 42990]]
and Procedure II of the Rules. NSCC also provides an Obligation
Warehouse service pursuant to Rule 51 and Procedure IIA, under which
certain transactions may be submitted for comparison that are not
otherwise submitted for processing to NSCC through its other services.
Over time, in efforts to promote straight-through processing, markets
have assumed increasing responsibility for trade comparison (i.e.,
matching the buy and sell side of a securities transaction) at the
point of trade, and submitting the transaction to NSCC on a ``locked-
in'' basis for trade recording purposes (i.e., with the transaction
details having been already compared). Today, all marketplaces
interfacing with NSCC have assumed responsibility for equity comparison
on their respective venues; as a result the level of over-the-counter
bilateral submissions of equity transactions to the equity comparison
operation has become nominal.\3\ In addition, NSCC's OTC Equity
Comparison service operates through legacy batch processing at the end
of the day. Trade capture processes now mostly run in a real-time
environment.
---------------------------------------------------------------------------
\3\ During May 2013, NSCC compared an average of approximately
90 sides (an approximate average of 45 trades) for equity
transactions through its OTC Comparison service. As of June 24,
2013, NSCC compared a total of 74 sides (37 trades) for the entire
month of June 2013 to date.
---------------------------------------------------------------------------
Rule 7 and Procedure II each contain notes stating that the
comparison function offered thereunder will discontinue once each
exchange and/or marketplace assumes responsibility for trade
comparison.\4\ Therefore, in light of the assumption of the comparison
function by each marketplace and minimal volume to equity trades
submissions to the OTC Equity Comparison service, NSCC proposes to
decommission its OTC Equity Comparison service offering. The proposed
change will not, however, impact comparison services with respect to
debt transactions (which are compared through the Real Time Trade
Matching (or ``RTTM'') system) or transactions submitted to the
Obligation Warehouse, both of which will continue to be processed in
the ordinary course. Once the OTC Equity Comparison service is
decommissioned, comparison submissions for equity transactions other
than those submitted to the Obligation Warehouse in accordance with
Rule 51 and Procedure IIA will not be accepted by NSCC and related
output will not be produced. As a result, upon the effective date of
this proposal, all equity transactions submitted for processing to
NSCC, other than those submitted through the Obligation Warehouse, must
be compared prior to submission (i.e., at the marketplace of execution
or through FINRA/NASDAQ's Automated Comparison Transaction facility
(``ACT'') and submitted to NSCC on a locked-in basis for trade
recording).
---------------------------------------------------------------------------
\4\ See footnotes to Rule 7 and Procedure II.
---------------------------------------------------------------------------
To facilitate this proposal, NSCC will mend Rule 7 (Comparison and
Trade Recording Operation) and Procedure II (Trade Comparison and
Recording Service) to reflect rules text changes consistent with the
above. NSCC also proposes to make technical changes to Procedure II to:
(i) delete a provision relating to the submission of municipal
securities transactions by Members on behalf of non-members, and (ii)
delete a provision relating to potential announcement via Important
Notice of the availability of the comparison service for when-issued
corporate securities.\5\
---------------------------------------------------------------------------
\5\ With respect to the former provision, the function described
is no longer in use and the provision has become obsolete, and with
respect to the latter provision, a comparison service is not
currently scheduled to be implemented for corporate when-issued
securities and NSCC would submit a rule filing to the Commission in
the event such an implementation is proposed.
---------------------------------------------------------------------------
In addition Rule 5 (General Provisions) will be revised to clarify
that output issued by NSCC with respect to transactions either compared
by it, or recorded locked-in transactions (defined as ``Compared
Contracts''), evidence valid, binding and enforceable compared
transactions for purposes of the Rules. In this regard, Rule 1
(Definitions) will be revised to reflect the definition of ``Compared
Contracts''.
NSCC will also: (i) Amend its fee schedule in Addendum A to the
Rules to delete references to charges associated with OTC equity
comparison, and (ii) make technical changes to the numbering of
footnotes and certain cross-references in the Rules to reflect the
changes noted above.
The effective date of the proposed rule change will be announced
via an NSCC Important Notice at least 30 days in advance of its
implementation.
(ii) Statutory Basis. The proposed rule change is consistent with
the requirements of Section 17A(b)(3)(F) \6\ of the Securities Exchange
Act of 1934, as amended (the ``Act''), and the rules and regulations
thereunder, because it provides for operational efficiencies by
promoting the comparison of transactions at the point of trade, and
therefore are designed to promote the prompt and accurate clearance and
settlement of securities transactions.
---------------------------------------------------------------------------
\6\ 15 U.S.C. 78q-1(b)(3)(F).
---------------------------------------------------------------------------
(B) Clearing Agency's Statement on Burden on Competition
NSCC does not believe that the proposed rule change will have any
impact, or impose any burden, on competition, as usage of the OTC
Equity Comparison service has declined significantly and other
alternatives (including NSCC's Obligation Warehouse and the ACT
facility) are available.
(C) Clearing Agency's Statement on Comments on the Proposed Rule Change
Received From Members, Participants, or Others
Written comments relating to the proposed rule change have not yet
been solicited or received with respect to this filing.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
Within 45 days of the date of publication of this notice in the
Federal Register or within such longer period up to 90 days (i) as the
Commission may designate if it finds such longer period to be
appropriate and publishes its reasons for so finding or (ii) as to
which the self-regulatory organization consents, the Commission will:
(A) By order approve or disapprove such proposed rule change, or
(B) institute proceedings to determine whether the proposed rule
change should be disapproved.
IV. Solicitation of Comments
Interested persons are invited to submit written data, views and
arguments concerning the foregoing, including whether the proposed rule
change is consistent with the Act. Comments may be submitted by any of
the following methods:
Electronic Comments
Use the Commission's Internet comment form (https://www.sec.gov/rules/sro.shtml); or
Send an email to rule-comments@sec.gov. Please include
File Number SR-NSCC-2013-09 on the subject line.
Paper Comments
Send paper comments in triplicate to Elizabeth M. Murphy,
Secretary, Securities and Exchange Commission, 100 F Street NE.,
Washington, DC 20549-1090.
All submissions should refer to File Number SR-NSCC-2013-09. This file
number should be included on the subject line if email is used. To help
the Commission process and review your comments more efficiently,
please use
[[Page 42991]]
only one method. The Commission will post all comments on the
Commission's Internet Web site (https://www.sec.gov/rules/sro.shtml).
Copies of the submission, all subsequent amendments, all written
statements with respect to the proposed rule change that are filed with
the Commission, and all written communications relating to the proposed
rule change between the Commission and any person, other than those
that may be withheld from the public in accordance with the provisions
of 5 U.S.C. 552, will be available for Web site viewing and printing in
the Commission's Public Reference Room, 100 F Street NE., Washington,
DC 20549 on official business days between the hours of 10:00 a.m. and
3:00 p.m. Copies of the filing also will be available for inspection
and copying at the principal office of NSCC and on NSCC's Web site
(https://www.dtcc.com/legal/rule_filings/nscc/2013.php). All comments
received will be posted without change; the Commission does not edit
personal identifying information from submissions. You should submit
only information that you wish to make available publicly. All
submissions should refer to File Number SR-NSCC-2013-09 and should be
submitted on or before August 8, 2013.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\7\
---------------------------------------------------------------------------
\7\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------
Elizabeth M. Murphy,
Secretary.
[FR Doc. 2013-17178 Filed 7-17-13; 8:45 am]
BILLING CODE 8011-01-P
